If you do not personally invest in cryptocurrencies, then it is likely that you have friends, family members or colleagues doing so at this time. Cryptocurrencies have risen from a very niche market to an almost complete mainstream, and they have done so in a very short time. Now that they are so ubiquitous, there is a new issue that needs to be debated, and that is the question of how cryptocurrencies are handled in the divorce process.
Determining and distributing financial assets, as well as determining alimony payments, are central issues that are addressed during most divorce proceedings. There are many tools available to a lawyer to detect financial assets, but when you combine Bitcoin and divorce, you are left with something completely new.
Handling Bitcoin and divorce differs from handling other financial assets for several major reasons. One is the pure volatility of their value. It is known that Bitcoin and other cryptocurrencies are going through absolutely wild changes, both up and down, in value. Therefore, the value either needs to continue to be monitored and updated on the fly, or to be set at a certain time, when in the end it could be worth something much different. In both cases, it is less than an ideal circumstance for determining and allocating property or determining alimony.
Another key issue to understand between cryptocurrency and divorce is that these markets and their transactions are designed to be anonymous and secure. Studying an individual’s assets, accounts, or transactions is not the same as looking for a bank account, retirement account, or stock portfolio. The traceability of an individual’s cryptocurrency will be difficult at best, and it remains unclear whether the courts put any power of subpoena behind it or not.
Clearly, this is just the beginning of the Bitcoin issue and divorce, as all cryptocurrencies are still on the rise. As more and more people start or continue to use them, and become more frequent and accepted, the way they are treated as financial assets during the divorce process will continue to be the focus of attention. The fact that they got up so fast in the beginning has left many people today unprepared for how to treat them in such things. Keep in mind, Bitcoin was launched less than a decade ago.
As always, be sure to consult with an experienced professional in your local area. While there is still much uncertainty about how Bitcoin and divorce will be handled and what types of judgments may await us in the future, an experienced divorce lawyer will be able to guide you through the process and offer insight into areas of financial discovery and all aspects of unresolved subject.